Including quality attributes in efficiency measures consistent with net benefit: creating incentives for evidence based medicine in practice

Eckermann, Simon and Coelli, Tim (2013) Including quality attributes in efficiency measures consistent with net benefit: creating incentives for evidence based medicine in practice. Social Science & Medicine, 76 1: 159-168. doi:10.1016/j.socscimed.2012.10.020


Author Eckermann, Simon
Coelli, Tim
Title Including quality attributes in efficiency measures consistent with net benefit: creating incentives for evidence based medicine in practice
Journal name Social Science & Medicine   Check publisher's open access policy
ISSN 0277-9536
1873-5347
Publication date 2013-01-01
Year available 2012
Sub-type Article (original research)
DOI 10.1016/j.socscimed.2012.10.020
Open Access Status Not yet assessed
Volume 76
Issue 1
Start page 159
End page 168
Total pages 10
Place of publication Kidlington, Oxford, United Kingdom
Publisher Pergamon
Language eng
Subject 3306 Health (social science)
1207 History and Philosophy of Science
Abstract Evidence based medicine supports net benefit maximising therapies and strategies in processes of health technology assessment (HTA) for reimbursement and subsidy decisions internationally. However, translation of evidence based medicine to practice is impeded by efficiency measures such as cost per case-mix adjusted separation in hospitals, which ignore health effects of care. In this paper we identify a correspondence method that allows quality variables under control of providers to be incorporated in efficiency measures consistent with maximising net benefit. Including effects framed from a disutility bearing (utility reducing) perspective (e.g. mortality, morbidity or reduction in life years) as inputs and minimising quality inclusive costs on the cost-disutility plane is shown to enable efficiency measures consistent with maximising net benefit under a one to one correspondence. The method combines advantages of radial properties with an appropriate objective of maximising net benefit to overcome problems of inappropriate objectives implicit with alternative methods, whether specifying quality variables with utility bearing output (e.g. survival, reduction in morbidity or life years), hyperbolic or exogenous variables. This correspondence approach is illustrated in undertaking efficiency comparison at a clinical activity level for 45 Australian hospitals allowing for their costs and mortality rates per admission. Explicit coverage and comparability conditions of the underlying correspondence method are also shown to provide a robust framework for preventing cost-shifting and cream-skimming incentives, with appropriate qualification of analysis and support for data linkage and risk adjustment where these conditions are not satisfied. Comparison on the cost-disutility plane has previously been shown to have distinct advantages in comparing multiple strategies in HTA, which this paper naturally extends to a robust method and framework for comparing efficiency of health care providers in practice. Consequently, the proposed approach provides a missing link between HTA and practice, to allow active incentives for evidence based net benefit maximisation in practice.
Formatted abstract
Evidence based medicine supports net benefit maximising therapies and strategies in processes of health technology assessment (HTA) for reimbursement and subsidy decisions internationally. However, translation of evidence based medicine to practice is impeded by efficiency measures such as cost per case-mix adjusted separation in hospitals, which ignore health effects of care. In this paper we identify a correspondence method that allows quality variables under control of providers to be incorporated in efficiency measures consistent with maximising net benefit. Including effects framed from a disutility bearing (utility reducing) perspective (e.g. mortality, morbidity or reduction in life years) as inputs and minimising quality inclusive costs on the cost-disutility plane is shown to enable efficiency measures consistent with maximising net benefit under a one to one correspondence. The method combines advantages of radial properties with an appropriate objective of maximising net benefit to overcome problems of inappropriate objectives implicit with alternative methods, whether specifying quality variables with utility bearing output (e.g. survival, reduction in morbidity or life years), hyperbolic or exogenous variables. This correspondence approach is illustrated in undertaking efficiency comparison at a clinical activity level for 45 Australian hospitals allowing for their costs and mortality rates per admission. Explicit coverage and comparability conditions of the underlying correspondence method are also shown to provide a robust framework for preventing cost-shifting and cream-skimming incentives, with appropriate qualification of analysis and support for data linkage and risk adjustment where these conditions are not satisfied. Comparison on the cost-disutility plane has previously been shown to have distinct advantages in comparing multiple strategies in HTA, which this paper naturally extends to a robust method and framework for comparing efficiency of health care providers in practice. Consequently, the proposed approach provides a missing link between HTA and practice, to allow active incentives for evidence based net benefit maximisation in practice.
Keyword Australia
Hospital efficiency
Specifying quality variables
Maximising net benefit
Economic incentives
Shadow price
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status UQ
Additional Notes Available online: 3 November 2012.

Document type: Journal Article
Sub-type: Article (original research)
Collections: Official 2013 Collection
School of Economics Publications
 
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